Change Management - a dialogue-oriented approach to master structural change - case study on the region of Nuremberg -

The concept

Change Management is based on the following considerations:

• The relevant social, economic and political actors must be convinced that structural change is necessary; a strong will to initiate and undergo structural change is needed.

• The different actors must be ready to agree on a leading model, the direction and the concrete objectives of the structural change. The process should not result in winner-loser positions.

• Structural change needs that economic development and labour market policy walk hand in hand. Sectoral thinking must be overcome.

• Structural change needs guidance in form of process moderation and management. This includes initiating and guiding the discussion, developing concepts, conceiving instruments and organising working steps for the identification and analysis of potentials and competencies, stimulating the creation of networks and initiatives, elaborating transfer solutions in the field of employment, giving impulses and creating incentives.

The objective of Change Management in the process of structural change is to modernise regional economic locations, to make them (more) competitive and thus to contribute to their preservation. In this context existing enterprises have to be taken care of and new investors to be attracted. The modernisation of economic structures necessarily leads to higher productivity and, generally, to a loss of jobs. Certainly, there is a relationship between higher competitiveness, new markets and the expansion of production, the latter creating additional employment possibilities. But since a positive overall labour market balance cannot be taken for granted, it reveals necessity to create appropriate transfers in the field of employment in order to support structural change and to compensate its negative effects on the labour market.

Change Management follows a number of steps. The most important are:

• Development of objectives and leading models
  Objectives and leading models should not be marketing-oriented but be based on realistic perspectives to give the structural change process an orientation, open up opportunities for action, stimulate cooperation and bring different interests together.

• Identification, analysis and mobilisation of core competencies
  Starting from the economic challenges the region is faced with, the potentials of the region have to be identified and assessed. Among the criteria of analysis and evaluation the overall national and international lines of competitiveness, the value added, the export potential, employment figures or numbers of enterprises in the respective field have to be considered.

• Initiation of cooperation and networks
  The actors of the same centre (or field) of competency are supported in the creation of initiatives and networks as a platform for communication and cooperation, ideally bringing together representatives from enterprises, trade unions, research institutions, politicians and administrators. Common leading projects allow the creation of synergistic effects; together projects can be realised which are beyond the possibilities of each single enterprise or research institute. The formation of clusters as a permanent, more intensive and systematic form of cooperation is one step further in the development of centres of competency. Clusters may but must not necessarily be part of the competency centre approach.

• Development and realisation of employment measures
  To respond to the possible negative employment effects of structural change and in order to support the structural change process, projects and measures have to be developed which open transfer possibilities for unemployed or those who will lose their jobs on the one hand, link labour market policy with economic development objectives on the other hand. This includes, among other things, the development of infrastructure, the improvement of qualification structures, the promotion of new business creation, of outsourcing or management buy out etc.

The approach of an actively promoted structural change founded on the development of centres of competency completely changes the traditional thinking in branches or sectors. The conventional concept is now replaced by a pattern including parameters such as chains of value added and their different segments - starting from research and development, production and ending with distribution or final utilisation and application. Due to the fact that regional economic locations need to be nationally and internationally competitive, categories like complexity and comprehensiveness of the chain of value added, the exportation ratio represented by each of its segments, national and international competitiveness or the formation of an international centre of excellence become crucial. According to this rationale, the policy of promotion (of the Land) often tends to follow international benchmarks: Only those projects are supported which promise to attain international best standards. This can but must not be the promotional approach.

The example of Nuremberg - process and state of development

The moderation of the process of structural change was initiated in the region of Nuremberg roughly ten years ago when the economic boost engendered by the reunification slowed down again and it became obvious that the traditional growth sectors in their present shape did no longer offer sufficient development potential. The original impulse to think differently came from the economic department of the city of Nuremberg, at first taken up by the trade unions. The starting point was the question which challenges the region would have to confront in the future, i.e. which economic areas would determine national and international competitiveness and if the region would be in a position to occupy these fields. After a first assessment of the competitive potentials of the region, it was time to make the entrepreneurs/employers of the region participate in the discussion. In particular those entrepreneurs/directors who were used to act in a broader context due to the size or export orientation of their company, were ready to join in. Other enterprises and the chamber of commerce and industry followed later. Finally, the 'Economic Forum of Nuremberg' was founded based on a core group of representatives from the business sector, from trade unions, politics and administration. This was the platform where the future centres of competency were conceptualised. The 'Economic Forum of Nuremberg' commissioned - funded by the participating enterprises - two research studies, one on traffic, another on information and communication technologies to verify scientifically the long-term viability of these fields of competency. On the basis of the results, the first centres of competency took shape resulting in different networks of cooperation.

To date, the axis of the three cities of Fürth, Nuremberg and Erlangen presents five centres of competency:

1. Communication and multimedia
   with a total of 8.000 enterprises, a workforce of 90.000 persons and a complete chain of value adding (from networks, network access and transfer technologies to data processing). The Nuremberg initiative for communication business (Nürnberger Initiative für Kommunikationswirtschaft e.V., NIK) unites employers, scientists, lecturers and representatives from the communities and the Land. Together a series of projects has been realised, among others the establishment of a course of studies in communication technologies at the university and capacity-building for education and training in information and communication technology. Clusters between enterprises aiming at a permanent cooperation evolved.
   
2. Traffic and logistics
   with approximately 250 SMEs and some few large enterprises including Siemens and MAN. The centre of competency employs 10% of the work force of the region and concentrates on traffic technology and logistics. The competency initiative 'Neuer Adler' (New Eagle) e.V. serves as platform of the exchange of information, the establishment of new contacts and the realisation of common leading projects.
   
3. Medicine and pharmaceutics
   employ 70.000 persons and involve approximately 150 SMEs. The competency initiative 'Medizin-Pharma-Gesundheit' (Medicine-pharmaceutics-health) was created to associate enterprises, universities, research and development institutions and the communities. Common projects are, among others, the 'trade fair and traffic 2000 plus', a programme for the development of routing systems for trade fairs.
   
4. Energy and environment
   represent a labour force of 47.000 persons and contribute 50% to the total turnover of industrial exports. Economy, science, communities and the Land cooperate in the competency initiative 'Energieregion' (energy region) Nuremberg. One of the projects of this field of competency is the centre of energy technology (Energietechnikzentrum, ETZ). It combines the double function of a science research centre and a business incubator with the objective to develop a creative environment.
   
5. New materials
   Supported by the High Tech Initiative of the Land Bavaria (a promotion programme for high technology developments), an 'innovation centre for new materials' was created recently. Similar to the above mentioned ETZ it provides a 'creative environment' through the combination of research and new business creation.

Future challenges

In the medium and long run, it will no longer suffice to define centres of competency on the basis of parameters like global lines of competition and chains of value adding. Instead, the reorganisation of the fields of competency using technological criteria will most probably become necessary. Technological categories will then decide on the participation of enterprises in the network structures. For the individual enterprises this will have consequences in terms of access to financial and other support.

One problem consists in the fact that the dynamism in the 'initiatives of competency' and other networks start to slow down. In general, management positions in the initiatives are understaffed and new impulses and innovative ideas do not necessarily come from inside the structures. Networks need stimulations from outside. It is also true that there are different perceptions regarding the objectives to be followed when creating a network. The perceptions range from pure communication platforms to clusters for a close and permanent cooperation. The different interests must be harmonised. The fact that in the past year some important companies closed down entirely (Adtranz - traffic) or partly (Lucent Technologies - information and communication technologies) has had a very negative impact on the momentum in the respective fields of competency. If an important segment in the chain falls away and substitutes cannot be found, the future of the entire field of competency is jeopardised. Similarly, the departure of one dynamic player can paralyse the whole centre.

Finally, the problem of unemployment remains unresolved particularly in periods where the general downward trend of the economy reinforces the employment effects of the structural change. The projects and measures conceived as transfer solutions in the process of change do no longer suffice to absorb those losing their work and to integrate them in new jobs. Here, new and additional solutions are required.

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